April 15, 2004

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The same political figures who engineered the current debacle in Iraq are now trying to blame the United Nations for more than $10.1 billion worth of oil revenue they claim Saddam Hussein diverted from the Oil for Food program. The issue prompted a hearing in the Senate Foreign Relations Committee on April 7, where the ghost of Jesse Helms has barely been exorcised, and will be raised in two House committees. One of those calling for a House hearing is Henry Hyde, chair of the International Relations Committee, who has said publicly that he wants the United States to leave the UN. Those raising the Oil for Food issue have also implied that UN Secretary General Kofi Annan was somehow involved because his son once worked for a firm that won a contract from the program–even though he’d left by the time it took effect.

But the accusers and their accusations bear more critical scrutiny. Much of the noise comes from the “Pentagon intellectuals,” their protégé and informant Ahmad Chalabi and the Wall Street Journal‘s editorialists, whose collective accusations are about as reliable as previous assurances that there were indeed weapons of mass destruction and that the UN was willfully not finding them. From National Review to the Wall Street Journal, the usual suspects have been banging away at the expedient scandal.

The Oil for Food program began as a way to maintain sanctions in the face of the suffering in Iraq that was eroding support for UN sanctions domestically and internationally. The Iraqis sold oil on the world market–often, ironically, to American companies, especially in the run-up to the invasion, to meet the fuel shortages caused by the threat of war. The proceeds of those sales went into an escrow account run by the Oil for Food program, from which the Iraqi government could draw to pay for bona fide humanitarian imports, after inspectors had verified their arrival in Iraq. By the time of the invasion, the program’s food rations were the lifeline in whole or in part for more than 80 percent of Iraq’s people.

Of the billions allegedly siphoned off, $5.7 billion was from smuggling oil through neighboring countries, such as US allies Jordan and Turkey. While this clearly broke sanctions, the United States never pressed those countries to stop it, although it did get annoyed when Syria belatedly made up its differences with Iraq and joined in the trade. The other $4.4 billion was the result of kickbacks from imports and surcharges on oil contracts. The Security Council, on which the United States has a veto, had allowed the Iraqis to negotiate their own contracts, and independent experts scrutinized them for signs of surcharging–but the Iraqis sophisticatedly kept the percentages within market ranges. A Security Council committee on which US diplomats played a prominent role scrutinized each contract, but its members never noticed the skimming until the Oil for Food office eventually alerted them to the problem. The committee tried to stop the kickbacks, but although UN officials also drew attention to overcharging on imports, not once did the US delegation put a hold on them.

At the core of the accusations is a list found in Baghdad of people who allegedly received “oil vouchers” from Saddam’s Baathist regime, which allowed them to collect the kickbacks that companies had agreed to pay Baghdad outside the UN contracts. It includes a “Mr. Sevan,” who the accusers happily suggest may be Benon Sevan, the longtime director of the Oil for Food program. He has denied the charge.

The neocons’ accusations of corruption invariably end with a falsely regretful conclusion that their “evidence” of mismanagement and corruption proves that the UN is not fit for the role in Iraq that most Iraqis want it to have, and indeed an increasingly desperate White House seems prepared to accept. In reality, they cannot countenance UN interference in their spoils of war in Iraq–and some also suspect that they may be trying to head off any attempt to draft Annan for a third term, punishing him for his temerity in not supporting the United States.

Where the UN is at fault is in underestimating the malice of its enemies. Kofi Annan, despite internal opposition from countries that may have had things to hide, should have set up an inquiry sooner, and the UN should perhaps have relaxed its inhibitions and struck back with some questions of its own to put the affair in perspective.

For example, it could usefully ask: What has the coalition done with the $7.6 billion in surpluses that the Oil for Food program was forced to hand over to the coalition’s development fund for Iraq? In March the recently constituted independent monitoring board, which has fought hard for independent audits, asked why the fund had paid Halliburton for uncontested contracts.Why didn’t the Administration release the names of US companies involved in the kickbacks? It admitted to the Senate that they are known–but withheld. The cynical may suspect a Texas oil-Bush connection. It could also ask how much longer, now that Saddam has gone, some of the oil revenue will be diverted from desperately poor Iraq to much richer countries, mostly to Kuwait. Until now, the Oil for Food program has paid more than $18 billion of Iraqi oil revenues for the largest reparations since Versailles. At current rates, 5 percent of Iraqi oil money will be diverted indefinitely to pay the balance of $30 billion in accepted claims. Kuwait has refused to discuss dropping its demands. Now that is worth a Foreign Relations Committee hearing.

Ian WilliamsIan Williams, formerly UN correspondent for The Nation, is the author of Rum: A Social and Sociable History of the Real Spirit of 1776; The Deserter: Bush's War on Military Families, Veterans and His Past; The Alms Trade; and The UN For Beginners.